What characterizes a confirmed fraud transaction?

A confirmed fraud transaction is characterized by being reported by an issuer as involving a lost, stolen, or counterfeit card. This designation clearly indicates that the transaction has been reviewed and verified as fraudulent based on established criteria. When an issuer reports a transaction in this manner, it reflects a breach of security and trust in the payments ecosystem, signifying that the cardholder did not authorize the transaction or that the card itself was compromised.

In contrast, a transaction involving a legitimately issued card, or one conducted by a responsible consumer, does not fit the definition of a confirmed fraud transaction, as these scenarios relate to legitimate usage or authorized behavior. Similarly, a transaction performed with a valid application pertains to the approval process for card issuance rather than fraud detection or identification. Thus, the uniqueness of the issuer's report regarding the fraudulent nature of the card is what solidifies the classification of such a transaction as confirmed fraud.